August 30, 2012

What innovations ought we aim for?

Robert Gordon has written an interesting paper, Is U.S. economic growth over? faltering innovation confronts the six headwinds about future economic growth. He argues that there is no fundamental reason to assume economic growth is going to remain indefinitely: in fact, there was little growth before 1750 and it could be that the last 250 years have just been a temporary exceptional period. The growth we have had has been due to three linked industrial revolutions - the steam one, the diesel one and the computing one - producing economic growth as their inventions become available but eventually petering off. Finally, even if he is too pessimistic about the near future innovation rate, there are growth-reducing "headwinds" (demography, education, inequality, globalization, energy/environment and debt) that at least are likely to slow the US for a long while.

In many ways this is a complement to Tyler Cowen's thesis in The Great Stagnation: we got a lot of growth out of low-hanging technological fruits that enabled us to build a great standard of living, but now it has become much harder to innovate something that truly matters.

What inventions do we need?

Gordon points out that a lot of innovation is not really innovative or important: they do not really change how things are done in society or how it is to live in it. The first and second parts of the industrial revolution drastically reduced the amount of unpleasant work and need for human effort, and increased life expectancies enormously. The computer revolution has improved productivity and efficiency in many ways, but the biggest gains seem to have been in entertainment and communication: more opportunities for consumption rather than replacing human labour with machines.

He makes a thought experiment:

You are required to make a choice between option A and option B. With option A you are allowed to keep 2002 electronic technology, including your Windows 98 laptop accessing Amazon, and you can keep running water and indoor toilets; but you canít use anything invented since 2002.

Option B is that you get everything invented in the past decade right up to Facebook, Twitter, and the iPad, but you have to give up running water and indoor toilets. You have to haul the water into your dwelling and carry out the waste. Even at 3am on a rainy night, your only toilet option is a wet and perhaps muddy walk to the outhouse. Which option do you choose?

His argument is rhetorically good, but also shows some interesting issues of what we want from technology. We do not care how we get a particular function (a steam-powered ipad is still OK) but we care about the function (having to go to the outhouse is not OK, even if it was a miracle of green engineering). The functions we care deeply about are the ones that interface directly with how it is to live or enable it: it fits with a Maslowian hierarchy of needs with food and shelter near the base and convenient entertainment further up.

Gordon points out that "A common feature of this innovative revolution was that many of the improvements could only happen once." Once things get better - indoor temperatures at a comfortable level rather than fluctuating, free and fast travel introduced, food hygiene achieved - there is not much that can be done in these domains. We might want greener air conditioning, faster air travel or nutritionally perfect food, but compared to the already made improvements they are going to be minor advances. I would assume that performance improvements in many domains - in terms of actual utility - are highly convex and quickly level off. A modern pocket calculator is faster than my first one from the 1980s, but for most calculations this speed difference is unimportant: I only care about it performing the basic arithmetic. We rarely care about Moore's law directly, just what it enables.

Stagnation as the old/new normal?

I can't judge his analysis of economic trends: productivity measurement remains mysterious to me. But this kind of argument is an interesting challenge to the accelerationist school of thought. The basic caricature view of theirs would be that productivity ought to increase faster and faster as we get technologies that not only replace or complement human labour, but also help develop better tech. The most extreme form is of course recursive self-improving AI: a small part of the the economy can make itself grow more or less arbitrarily fast (and hence, in principle, the whole economy could take off).

This likely underestimates the importance of particular technologies unleashing new domains of activity: great inventions pushes the productivity frontier in a lumpy manner. The stagnation people think we are getting too few innovations, either because they are getting harder to find or because we are doing something wrong.

One can also make a lumpy long run view like Robin Hanson's growth mode theory: yes, industrial revolutions are fairly discrete things and do peter out. It is just that they happen from time to time, and in the long run they tend to build on each other: growth is not just due to inventions, but to the kinds of societies they enable. One open question is of course if they come more and more often, or whether they can be arbitrarily far apart in time.

What to invent?

It is also interesting to consider what kinds of inventions would produce something important for the human condition, as desirable and transformative as indoor plumbing, personal vehicles or antibiotics. Here is my tentative list:

Automated medicine: since the cost of services is proportional to salary costs, it tends to remain high. Automated systems can be made cheaper since once invented they can be replicated. Hence, automation of parts of medicine would be important in both lowering healthcare costs and making it affordable for poorer people.

Anti-ageing technology: beside the huge (mainly positive) economic impact it would also affect the structure of life and how it is lived. It is likely to be a fairly desired technology, leading to big efforts to make it cheaper and more widely available.

New manufacturing methods: automated micromanufacturing like 3D printing - once good enough - makes customisation and experimentation easier, places control over the means of manufacturing in the hands of people directly, avoids the need for long-range transport of many goods etc. There are no doubt economies of scale for making many things, but this will open the production frontier for many objects that currently are fairly niche.

Molecular precision manufacturing: nanotechnological manufacturing would enable a large range of new materials that would in turn transform other domains or allow new possibilities. While MPM itself is unlikely to be personally important, it would enable a large number of technologies that are likely to be intimate and essential.

Education technology: just like medicine, if education could be automated effectively (or we could figure out better or faster ways of doing it), more human capital would become available more cheaply. That would be individually and collectively good.

Cognitive enhancement: Since cognition underlies so much of our lives, improvement in mental abilities can be a big deal individually and collectively. Boosting societal cognition likely has a measurable effect on economic growth through network effects, improved cooperation and reduced friction.

Emotional enhancement technologies: Obviously, if they work, important for human well-being. There have been some studies of the bad economic effects of divorce, and clearly pair bond enhancing methods would be helpful. But presumably happier societies with more mental health would also have other network effects: depression not only leads to individuals suffering and not being productive, but also to losses in their social network.

Brain emulation: this is an obvious way of jumping straight into a posthuman state. It would have enormous effects - backup copies, customizable bodies, easy neurohacking, speed regulation, copyable human capital.

Artificial intelligence: even fairly mild AI with merely natural language understanding and human-level intellectual abilities could make labour costs far lower. Just consider how many jobs are merely about following fairly well-defined rules in standardised situations. Higher grade AI, able to do any job a human could do, would obviously have a far bigger impact. Like brain emulation it also allows skill capital to be copied and distributed at nearly no cost.

Space colonisation: Space industrialisation likely requires space colonisation, since the primary market for much of what is manufactured up there is going to be up there. However, just fixing the energy situation through space power satellites and creating extra potentially available living space would likely be a big deal. In addition, it would provide a large expansive frontier of colonisation and exploration - a culturally important function. Similar arguments might be advanced for sea colonisation or Arctic colonisation (which, as Charles Stross has pointed out, are far easier).

Existential risk reduction: Perhaps the ultimate public good. Technologies that reduce the risk of mankind going extinct are morally extremely important and do affect the collective human condition.

The point of these is that once they exist, rational people would not want to go back to the previous state even for a fairly high compensation.

Note that early technologies do not have to be about fixing early steps on the hierarchy of needs. Yes, we tend to try to solve those first, but the earth-shattering innovations are still random. Writing, one of the biggest leaps, occurred very early but did not solve the perhaps more pressing food, health and shelter problems. We still haven't solved ageing, despite it producing 100% mortality.

I suspect that, looking back from the far future, the above list will seem rather naive. But the important angle is to realize that there are things to invent or find solutions to that would change the human condition. They are worth pursuing if we want more growth, and they are worth investigating if we want to have a say in how the human condition changes.